Advantages of Ethereum
Ethereum platform benefits from all the properties of the Blockchain technology that it runs on. It is completely immune to any third party interventions, which means that all the decentralized apps and DAOs deployed within the network can’t be controlled by anyone at all.
Any Blockchain network is formed around a principle of consensus, meaning that all the nodes within the system need to agree on every change made within it. This eliminates possibilities of fraud, corruption and makes the network tamper-proof.
The whole platform is decentralized, which means there is no possible single point of failure. Hence, all the apps will always stay online and never switch off. Moreover, the decentralized nature and cryptographic security make the Ethereum network well protected against possible hacking attacks and fraudulent activities.
Disadvantages of Ethereum
Despite the fact that smart contracts are meant to make the network fault-proof, they can only be as good as the people writing the code for them. There is always room for human error, and any mistake in the code might get exploited. If that happens, there is no direct way to stop a hacker attack or an exploitation of said mistake. The only possible way of doing so would be to reach a consensus and rewrite an underlying code. However, this goes completely against the very essence of the Blockchain, as it is supposed to be an unchangeable and immutable ledger.
‘The DAO,’ which is a name of a particular DAO launched on April 30, 2016, was attacked and more than 3.6 mln Ether tokens were stolen from it. The attacker exploited a ‘recursive call bug’ in the code, essentially just draining the funds from DAO into a ‘child DAO,’ that had the same structure as The DAO. The loss of a massive chunk of The DAO’s funding wasn’t the only consequence of the attack, as it basically undermined the users’ trust in the whole Ethereum network, with Ether’s value falling from over $20 to under $13.